Dec. 19 (Bloomberg) -- Chile’s peso touched a five-month
low against Mexico’s currency on speculation the central bank in
Santiago will refrain from boosting interest rates for a longer
period that its Mexican counterpart.

Chile’s currency was little changed at 37.2902 per Mexican
peso at the close in Santiago after touching 37.3770, the
weakest on an intraday basis since July 5. The Chilean peso
depreciated 0.2 percent to 475.15 per U.S. dollar.

Swap rates imply Chile’s central bank will leave its target
lending rate at 5 percent for the next six months, according to
Banco de Chile calculations. Traders in Mexican swaps were
projecting at the end of last month a 52 percent chance of an
increase in the 4.50 percent benchmark to 5 percent in March,
according to data compiled by Bloomberg. Mexican President
Enrique Pena Nieto has signaled he will adopt measures to boost
the nation’s economic growth.

“Mexico’s growth story is very resilient, and there are
hopes for the reform agenda,” said Alejandro Cuadrado, a
foreign-exchange strategist at Banco Bilbao Vizcaya Argentaria
SA in New York.

While the Chilean and Mexican pesos are the strongest major
currencies in the region this year, Chile’s currency has
weakened 0.1 percent in the fourth quarter while Mexico’s has
risen 1 percent.

International investors in the Chilean peso forwards market
had a $5.4 billion short peso position on Dec. 17, the lowest
since March, according to data published today by the central
bank. A short is a bet an asset will lose value.